Financing Development

The G8 and UN Contribution

Michele Fratianni, John J. Kirton

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9780754646761
• eBook ISBN:
  9781317135098
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The critical challenge of financing development and sustainability is a key focus for the world's international financial institutions, led by the International Monetary Fund, the World Bank, and, above all, the G8. This volume assesses the current practice and perspectives of the major developed world countries that dominate the boards of the IMF and the World Bank and comprise the G8. It looks at the prospects for meeting the Millennium Development Goals in the most impoverished region of Africa, the way trade and finance instruments can help, and how the challenges of energy security and climate change control will affect the results. This volume offers in-depth analysis of: * how the Millennium Development Goals are to be met * North-to-South resource transfers * the challenges of controlling climate control beyond Kyoto In sum, this volume provides a critical and creative examination of what the G8 governments, especially at and after the 2005 Gleneagles summit, have done and what they should do to promote development and sustainability.

PART I
Introduction

Chapter 1

Introduction, Arguments, and Conclusions

John J. Kirton, Michele Fratianni, and Paolo Savona

In September 2005, the leaders of virtually all the world’s national governments met at the United Nations World Summit in New York to assess how far they had come, and what remained to be done, to meet the ambitious Millennium Development Goals (MDGs) they had set five years before. In New York there was broad agreement on the importance and appropriateness of the goals, but also on how little had been accomplished, and how large was the task that remained. The leaders also acknowledged that they would fail to meet their goals unless major new financial resources for development could be mobilised, properly targeted, assembled into well-designed packages, delivered through the right mechanisms, and closely monitored to ensure they were effectively used. The longstanding challenge of financing development had reached a critical stage.

This same challenge served as the key focus for the G8’s annual summit at Gleneagles, Scotland, on 6–8 July 2005. Gleneagles was the culmination of the central concern devoted to African development by the modernised G8 during the previous five years. In 2001, the year after the MDGs had been set at the UN, African leaders had come to the G8 summit with a new plan to develop a continent that still remained the poorest one in the world. G8 leaders declared that they would support the plan and invited the Africans to return the following year. To the G8’s 2002 Kananaskis Summit, the Africans brought their New Partnership for Africa’s Development (NEPAD). The G8 responded with its own reinforcing G8 Africa Action Plan. At the summits at Evian in 2003 and Sea Island in 2004, the African leaders and their agendas again assumed a prominent place and secured G8 support across an expanding domain. But as 2005 opened and the G8 and UN summits in Gleneagles and New York loomed, the world wondered if the G8 would finally raise the resources required to finance Africa’s NEPAD and global development more generally to bring the MDGs within reach.

More than money was needed to meet the challenge. As the Africa Action Plan had recognised, the task of developing Africa and other poor regions required decisive action across a broad range of fields. Indeed, the plan’s seven-step programme had begun with the political imperatives of stopping the wars, strengthening good governance, and restoring confidence to stop capital flight and attract foreign direct investment (FDI). Only on this foundation came the traditional economic instruments of more debt relief, official development assistance (ODA), and liberalised trade. This new 21st-century approach to development was broadly endorsed by African and developed country governments, by the world’s major multilateral organisations, by many in civil society, and by G8 leaders themselves.

With the MDG destination and Africa Action Plan roadmap so widely accepted, the outstanding question for 2005 was whether the G8 at Gleneagles and afterward could mobilise the massive monies required to deliver the programme and produce the supportive political conditions needed to make these monies effective in the field. Behind lay the deeper question of whether the model itself, based on a genuine partnership for democratic development led and owned by the Africans themselves, was still the right approach, in light of the changed conditions and accumulated experience since 2002. A more immediate concern was whether the G8 governors at Gleneagles, preoccupied by pressing global issues such as climate change, terrorism, and the conflict in the Middle East, would devote to African and global development enough attention, mutual adjustment, and political will to get the highly ambitious, historic job done. In short, would the G8, with its great push at Gleneagles, finally succeed in financing development to reach the MDGs, in a world where the UN, with its galaxy of multilateral organisations and their members, had itself failed for the past 60 years?

The Purpose

This book addresses this central question of financing development. It has four key purposes. The first is to assess how well the G8, the UN, and the broader global community have done in meeting the many challenges of financing development, especially at and after the Gleneagles G8 Summit in 2005. The second is to explore more deeply what Africa really needs for its development by way of financing and supportive measures, and how well these needs were reflected in the G8’s Africa Action Plan and Tony Blair’s Commission for Africa (CfA) — the two great guides for Gleneagles’s work. The third is to re-examine the traditional instruments for financing development — debt relief, aid, and trade — to ask how much of what forms of each are required to get the job done. The fourth is to explore, after the two great summits of 2005 of the G8 at Gleneagles and the UN in New York, what the G8, the UN, and others should do to advance the MDGs and the broader development task.

G8 Performance

The first purpose directs attention to the performance of a G8 summit that was redesigned by Tony Blair as its host at Birmingham in 1998, subsequently adopted Africa as a major priority and partner for the 21st century, and then culminated at Gleneagles in 2005 by giving the issue of African development pride of place. Certainly there is much scepticism that the G8 did, and could do, as much for global development and Africa as the poor in the world need and deserve. The prevailing view is that despite some advance, the G8 has been following the wrong model (Dixon and Williams 2001), that even the most committed G8 member countries and leaders have fallen short (Black 2005; Lewis 2005), and that Gleneagles’ accomplishments were modest indeed (Moss 2006). Yet some suggest that Gleneagles did meet its financing development challenge (Clarke 2005). And others argue that in important areas such as debt relief, the Gleneagles G8 made major moves forward, driven by the United States and its concerns about Iraq and evangelical conservatism (Mistry 2005; Helleiner and Cameron 2006). Yet many point to the outstanding question of whether the major commitments will be implemented, consolidated, and sustained (Landsberg 2005).

To advance this debate, this book examines with analytical discipline and empirical detail how well the G8 and Gleneagles Summit did, why they performed as they did, and how effective their approach and execution were in meeting the real needs of Africa and the global community. In doing so it builds, applies, assesses, and advances some of the major models developed to evaluate and explain G8 performance, from both mainstream and more critical domains. Here it asks if the G8 acted primarily as an American-led coalition serving U.S. goals (Putnam and Bayne 1987), a concert of equals promoting open democracy, individual liberty, and social advance (Hodges, Kirton, and Daniels 1999; Fratianni, Savona, and Kirton 2005), a collective management forum pulling together for the common global good (Bayne 2005), a group hegemon protecting the privileges of the rich and promoting the neo-liberal order they prefer (Bailin 2005), or a catalyst for multilateral institutions that respond to their political will (Kokotsis 1999).

It also asks, in more open-ended fashion, several more specific questions about the performance of the 21st-century G8 summits. Where and why do they work well? Where along the spectrum of their functions — from domestic political management, through deliberation, direction setting, decision making, and delivery, to the development of global governance — are they most likely to succeed and to fail? What is the proper blend of iteration and innovation, or continuity and creativity, required for them to succeed? How do the G8’s participants from outreach countries, from civil society, and from multilateral organisations help or hinder its work? And how did determined leaders, notably Tony Blair as host of Gleneagles in 2005, respond to or transcend electoral and other domestic pressures and international constraints to pioneer the big deals needed to get the financing development job done?

Models of Development

The second purpose of this book is to look behind the high-profile G8 and UN summits of 2005 to ask how well the approach of the G8 and the UN more broadly understood and reflected Africa’s real needs. It takes up questions that have long preoccupied the development community in both the scholarly and policy-making spheres. A central concern is whether the traditional instruments of aid, debt relief, and trade liberalisation offered by developed country donors should still command centre stage, or whether an approach that recognises the primacy of the political and the responsibility of the recipients should now be put in first place. NEPAD and the Africa Action Plan have long been subject to close and critical scrutiny, in themselves, in relation to one other, and in regard to the MDGs (Hope 2002; Maxwell and Christiansen 2002; De Waal 2002; Melber 2002; Matthews 2004; Akopari 2004; Manby 2004; Ramsbotham, Bah, and Calder 2005; Landsberg 2005). That attention has now extended to the CfA (Landsberg and Kalete 2005; Mistry 2005). Some have charged that the CfA, established by Blair as the successor to G8 Africa Action Plan, and the many advocates affiliated with the UN unwisely emphasised the singular demand for more aid (CfA 2005; 2006; Mistry 2005; Taylor 2005, 2006). Yet others vigorously reply that the CfA, faithful to the Africa Action Plan paradigm, presented a much broader, more balanced, politically sensitive, and developmentally appropriate approach, even if it had some defects in process and product along the way (Mayhew, Tibenderanas, and Haines 2005; Wickstead 2006; Adefuye 2006; Mbiba 2006).

The focus in this volume is on the adequacy and the consistency of the Africa Action Plan and the CfA’s report with each other and with Africa’s realities and needs. Did these designs and, more generally, the MDGs comprehend and consistently work to achieve what was really required? Particular attention is given to three issues. First, how much of a genuine partnership has emerged between African and developing countries on the one hand and G8 and developed countries on the other (Abrahamsen 2004; Busumtwi-Sam 2006)? Second, how much are the political preconditions for making effective use of development finance in place? Third, how much of the responsibility for success and failure lies with the Africans and developing countries themselves?

Debt, Aid, and Trade as Instruments

The third purpose of this book is to examine in detail the three major instruments of debt relief, aid, and trade. These assumed pride of place in 2005, as they were highlighted by the Gleneagles G8, by civil society’s Make Poverty History (MPH) campaign, by Jeffrey Sachs (2005), Stephen Lewis (2005), and others associated with the UN and by the MDG programme itself (UN Millennium Project 2005). Yet their contribution is surrounded by controversy, with regard to each instrument used individually and to their configuration overall. Regarding the most venerable instrument, ODA, some claim that aid does deliver development when the policy context is right (Burnside and Dollar 2000) or even when it is not (Clemens, Radelet, and Bhavnani 2004). Others respond that better evidence shows it does not and that its role has been badly oversold (Easterly 2006, 2003, 2002; Easterly, Levine, and Roodman 2003; Birdsall, Rodrik, and Subramanian 2005; Mistry 2005; Calderisi 2006). Similar doubts arise over debt relief (Moss 2006).

This book’s central concern is with the relationship among ODA, trade liberalisation, and debt relief, and in particular with whether the Doha Development Agenda of the World Trade Organization (WTO) has the right approach and the proper support from the G8. Yet the analysis goes beyond the traditional big three instruments to consider other mechanisms, such as remittances, micro-credit, and private philanthropy, that may play a more important role in today’s rapidly globalising world. It also looks more broadly at two more basic forces that can overwhelm any successes in financing development — global growth in a world economy beset by big financial imbalances and competing development models, and by the overriding challenge of ecologically sustainable development with climate change at its core.

Recommendations for Reform

The fourth purpose of this book is to assemble a set of recommendations for policy reform in both the important international institutions and the national governments that bring policy change to life. Certainly there is already an abundance of proposals for how to finance, promote, and secure development in more effective ways. These cover a broad array of political, economic, and legal measures, and the role of developed and developing countries, the G8 and the UN, and civil society alike. A few of those issues, such as the need for all G8 and other countries to ratify the UN Convention against Corruption, command wide agreement across otherwise divided groups (Taylor 2006; Wickstead 2006).

The emphasis in this book is on proposals that meet three criteria: They flow directly from the underlying analysis of what works and what does not. They are moves that are readily available and realistically capable of being adopted and put into practice in the short term. And they aim broadly at the many actors involved, from the G8 itself to the broader multilateral system and to civil society itself. These proposals take full account of the considerable uncertainty about whether many of the existing favourites will actually have the intended effects. On this basis this books offers some suggestions for future research before any rush to advocacy or adoption is begun.

The Contributors

To accomplish these purposes this book has assembled contributions from leading scholars from the disciplines of economics, political science, and development studies and selected practitioners from the G8 countries and multilateral organisations centrally involved. The contributors come from most G8 countries and regions, from the academic disciplines of management studies, economics, and political science, and from the university and research communities. This group features those who have senior-level experience in national governments and international organisations. They also balance and bridge the worlds of North America, Europe, and the developing world. Together they offer the new thinking and useful policy advice that can result from such interdisciplinary and cross-community research.

The Contributions

This book takes up in turn these four central questions that lie at the core of the contemporary financing development debate. Part I, ‘The Gleneagles G8 Summit’, focusses on G8 performance. It examines directly how well the G8 and its major developing country partners met the many challenges of financing development at and after the 2005 summit, especially the task of providing the momentum for the UN summit and the major multilateral meetings that took place during the following year.

In Chapter 2, ‘Has the G8 Summit Met Its Objectives? The Answers from Gleneagles’, Nicholas Bayne evaluates the success of Gleneagles by comparing it on four key criteria with the performance of the other summits held since Britain last hosted at Birmingham in 1998. Bayne concludes that the summits since Birmingham have done better in launching initiatives and striking deals among the heads themselves, as did Gleneagles with its important agreements on Africa and climate change. The post-1998 G8 summits also maintained their collective management, despite the divisions over the 2003 invasion of Iraq, and modified it with greater outreach to non-G8 countries. At Gleneagles this solidarity was strikingly displayed when the G8 leaders closed ranks behind Blair after the London terrorist attacks on 7 July and when the outreach meetings, with heads from five major developing countries and with seven African leaders, were unusually productive. The new G8 objective of integrating economic and political programmes was pursued at Gleneagles on Africa and the Middle East. The recurrent failures on reconciling international and domestic pressures were overcome at Gleneagles, despite the electoral weakness of many of the participating leaders, by important commitments on Africa and by setting a clear path for dealing with climate change. Iteration thus worked on Africa, although the lack of a clear structure for follow-up meant that success in implementation could only be judged in the years ahead. Nonetheless, one year later, Gleneagles could be given a grade of A–for its performance, and thus judged to be one of the most successful in the 32 years of the G7/8 forum. The results of the St. Petersburg Summit in 2006 and the Heiligendamm Summit in 2007 sustain this judgement, even if the success in implementing Gleneagles commitment over the longer term remains to be seen.

In Chapter 3, ‘Gleneagles G8 Summit Perspectives’, Martin Donnelly details, from the perspective of the UK presidency, the preparations and negotiations for Gleneagles and its results. He outlines how agreement was reached on African development and climate change and how implementation of these agreements could be advanced. He argues that after lengthy and at times difficult negotiations, the summit produced substantial and ambitious policy commitments backed by a strong, shared political will to carry them out. The results since Gleneagles support this view. The UK’s presidency thus demonstrated that the G8 remains a unique and valuable part of global governance, with the capacity to mobilise political and economic resources to confront shared challenges.

In Chapter 4, ‘Energising Sustainable Development: The G8’s Gleneagles Performance’, John Kirton examines the plans and preparations for Gleneagles, the positions of the G8 members, the six forces highlighted by the concert equality model that pushed and pulled them toward high performance and the historic success that came as a result. Kirton argues that Blair planned from the start to make history on the two highly ambitious global priorities of democratic development in Africa and climate change control. His summit succeeded to an exceptional degree, producing new highs in domestic political approval, deliberation, direction setting, and money mobilised, and performing well in decision making, delivery of its commitments, and the innovative development of G8-centred governance. This success was partly pushed from the outside by shared vulnerabilities to global forces and shocks such as terrorism, by the failures o...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Tables
• List of Figures
• List of Contributors
• Preface and Acknowledgements
• List of Abbreviations and Acronyms
• PART I: INTRODUCTION
• PART II: THE GLENEAGLES G8 SUMMIT
• PART III: AFRICA
• PART IV: THE INSTRUMENTS
• APPENDIX
• Bibliography
• Index